Lee plans portfolio cut as HSI continues climb

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Lee Shau-kee said yesterday he is about to reduce his investment portfolio as the Hang Seng Index approaches 20,000 points.

'I am not bearish on the stock market, just offloading some of my stocks [to realise gains],' said Mr Lee, the chairman of Henderson Land Development, adding that the bull market had already returned.

He did not say which stocks he planned to sell. However, he said Industrial and Commercial Bank of China, China Life Insurance, China Shenhua Energy, CNOOC and China Overseas Land & Investment were his top investment picks at the moment.

Mr Lee first revealed his latest strategies less than a month ago when the Hang Seng Index stood at 18,600 points. He said then he would sell 10 per cent of his investment portfolio when the index rebounded to between 20,000 and 21,000 points, and would gradually reduce his holdings by 50 per cent when it reached 25,000. The rest would be held as long-term investments.

Since his June 26 pronouncement, the index has risen 4.85 per cent or 901.47 points, closing at 19,501.73 points yesterday when he reiterated the view that the stock market would enter a consolidation in the third quarter. He said he would buy more stocks when the index had retreated to 16,000.

Mr Lee, who has been a strategic or cornerstone investor in many initial public offerings in the past, said he had subscribed for US$100 million worth of shares in listing candidate BBMG Corp, the mainland cement producer that is looking to raise HK$5.95 billion in a share float this week, but believes he will only be offered a limited amount.

'It is becoming more difficult to make good profit from investing in IPOs ... they only allocate small amounts of shares for the quality plays,' Mr Lee said.

He said he would study carefully mainland property stocks in the listing pipeline before making any investments. He believes the quality of the current candidates in general was inferior to that of their predecessors.